Wen/guo Liang

Just past 2018, Ctrip has become the world's first GMV in the OTA industry, reaching 690 billion yuan; but in the Internet industry, paper can't hold fire, and Ctrip's reputation has fallen to the ground, and it's becoming like Baidu, where everyone is shouting.

For example, in December 2018, Zhang Xiaobo, president of Phoenix Link, sued Ctrip for price fraud and issued a notice to ban Ctrip within the company; Ctrip's website is suspected of data fraud in Japan, and the exposure by NHK TV triggered public opinion.

In October 2015, after Ctrip.com went through a complex share swap deal with Baidu and GoWhere, Ctrip took a controlling stake in GoWhere and Baidu took a stake in Ctrip.

In retrospect, this deal was the beginning of a series of bad stories over the next three years.

As Ctrip returned to OTA dominance with the annexation of its biggest competitor at the time, Where to Go, founder Liang Jianzhang shifted his focus from competing with competitors to curry favor with users to turning a profit on them. Bundled sales, high-priced return and change, big data to kill, these three "profit magic weapon" is buried in the Ctrip user experience, so that people can not prevent.

Ctrip was founded in 1999 by Liang Jianzhang, with Alibaba, Tencent, Sina and other well-known enterprises are the first batch of Chinese Internet "veterans".

The founders of this group of companies, in addition to Jack Ma's English teacher origin, most of the other founders have IT technical background, that is, the legendary "science and technology", Liang Jianzhang is such a typical science and technology men.

The Shanghai man developed his first computer program at the age of 14, did not graduate from junior high school and was admitted to the Fudan University Junior Class, and then entered the United States to study at the Georgia Institute of Technology. He was 20 years old when he got his master's degree. After working in Silicon Valley for 10 years, he returned to Shanghai from the U.S. and founded Ctrip. It took another 5 years for him to bring Ctrip back to the United States, landing on NASDAQ earlier than BAT.

"Profit" is also the label of Ctrip, from the beginning of the creation of Ctrip, Ctrip did not worry about the "profit model".

Ctrip for the hotel, air ticket industry to build a standardized product information trafficking network intermediary platform, people through this platform to book air tickets and hotels, Ctrip and then from the hotels and airlines here to receive commissions, belonging to the intermediary to earn the difference in price model.

Ali's Flying Pig, which is also involved in online travel, has adopted a platform model that attracts merchants and users, and then seeks to cash in on the ecosystem. In contrast, the Ctrip model requires every single business to make money, and the pursuit of gross margin in the transaction.

Obviously, Ctrip is simpler, more direct, and straightforward, which is in line with Liang's thinking at the beginning of his career. He has an extremely pragmatic and smart brain, without exception, to start what seems to be a smooth sailing life.

This smooth gene has allowed Ctrip to see very few crises in almost 20 years. Liang has also stepped down as CEO twice, in 2006 and 2016, transitioning into a scholar who studies demographic issues. After the outbreak of public opinion crisis such as bundled sales, many executives within Ctrip's attitude towards this is "these storms are not a very serious problem, and will soon pass."

However, the worst problem is that they don't think that this kind of storm is a problem that will kill the reputation of the company.

This arrogance in belittling the crisis is built on Ctrip's superb profitability, but the crisis will come sooner or later.

It turns out that whenever Liang was away from Ctrip, the business was unplayable. And when he returns, Ctrip will become the industry's "dominant president".

Liang Jianzhang long-sleeved capital operation and out of the world of ambition, from the "mouse + cement" to "thumb + cement", for Ctrip to build a one-stop platform encompassing consumer travel travel, accommodation, ticketing and consumption, which is called the online empire. The company's business is a one-stop platform for consumers to travel, stay, and consume tickets.

But the creation of this online empire came at a huge cost that had to be recovered.

Between 2006 and 2012, Liang left the company for the first time. During this time, Eolong, Tongtou, Tujia, and Go.com continued to eat into the market, either developing better applications, finding lower-priced partnership models, or creating more segmented play styles. Liang Jianzhang received a call from an old friend at the end of 2012, and the other party bluntly said that people's cell phone software is better to use, and the price of air tickets and hotels is indeed cheaper than your home ah.

He had to return, and then set off a campaign of rectification within the company, the pyramid management structure reorganized into a business unit system, each business unit incubated more project groups; external is to open a bloody price war, out of the $ 500 million seriously and rivals to fight.

After this war, Ctrip had a hemorrhage - profits fell 39%. But Liang Jianzhang's intention is not to do this, but to kill rivals - Eolong's profit margins fell by 98%, and where to go also suffered internal injuries. Within two years of the big fight, Ctrip took stakes or holdings in more than 20 companies, and eventually swallowed its most threatening competitive rivals, Yilong and GoWhere, in 2015.

In 2018, the Ctrip system has close to 50 companies, including: OTA sites Tongcheng, Toutiao, Yilong, and Where to go; travel rental car category YiHi, YiTao, Mobike, and Tang pick up; hotel and booking brands Tujia, Eagle Desert Travel, Yujia B&B, and Jiuqi inn chain; overseas-oriented travel and travel platforms Travelfusion, MakeMyTrip, Skyscanner, Trip.com and so on. In addition, it has also penetrated into insurance, finance, immigration services, airlines, medical care, catering and other business areas.

By now, Ctrip's online empire has a new look.

The online business map is gradually stabilized, in order to recover the cost, offline revealed the "magic" side of Ctrip.

Ctrip is an old Internet company, but many people subconsciously do not regard it as a pure Internet business.

The reason is that Ctrip has never sought Internet entrepreneurs whimsical Internet thinking, the most important connotation of this thinking is "online asset-light model". The most important implication of this thinking is the "online asset-light" model. Liang Jianzhang himself said: "Tourism is a material industry, it is impossible to be completely virtualized. The so-called "mouse+cement" or "thumb+cement" model of Ctrip is actually the "online+offline" O2O model that has been widely known since then.

When Liang left Ctrip for the first time in 2006, he had already done a good job for the enterprise "online information platform + offline call center + ground push team" structure, and said "the industry can not see competitors with binoculars".

Fierce.

The ferocious marketing to get BD resources, the crazy free card to get user traffic, the rapid possession of the market in return for the investment of capital ...... let Ctrip firmly occupy that period of barbaric years. After many years, a lot of online players with "Internet thinking" still can't penetrate the mystery, seemingly perfect business model once encountered offline stores and consumers, will be a chicken feather.

Because for the Internet industry, it's easy to be light and hard to be heavy. But Ctrip mastered this set of things very early and skillfully.

Success is also Xiaohe, defeat is also Xiaohe. The savage growth of the offline, both so that Ctrip has gained a head start in the market, but also so that they planted the seeds of conflict in the beginning - in the final analysis, Ctrip's business model belongs to the service industry, and beauty stores, restaurants, real estate agents do not have the essential difference between the service industry, this "hard line The real meaning of "hard work" in the service industry is to "put yourself down to please the guests".

This is exactly where Ctrip is neither good nor willing. How can Liang Jianzhang, who is going well, put himself down to please the guests?

The reason why he chose the online travel agency industry is because hotels and flights are standardized products, and there is no need to rack your brain to please anyone. He is committed to building a magic business system of extreme simplicity and turning gold into gold in order to make it easier to get an exaggerated return on capital.

Such a design is a natural contradiction to the service industry's demand for a no-nonsense, no-hassle service ethos.

A person without the spirit of service in the service industry is a disaster for everyone. What's even more frightening is that Ctrip's genes are so strong that the top three domestic hotel groups: Ruijia, Ptao, Huazhou, the founders are from Ctrip out.

One of Ctrip's co-founders, Ji Qi, founded Ruijia and Huazhou, which was later merged into the First Travel Group; Ctrip's former vice president of marketing, Zheng Nanyan, founded the Ptao Group, which was later merged into Jinjiang, a subsidiary of Shanghai's State-owned Assets Supervision and Administration Commission (SASAC).

Ordinary consumers may know that Nu Jia, but Huazhu and Ptao is relatively new, in fact, Huazhu is the parent company of Hanting Hotels, Ptao is the parent company of 7 days of hotels. These three hotel companies are almost synonymous with China's budget hotels, and they also contain genes similar to Ctrip's - making good use of the power of capital to quickly do large-scale, good at calculating the business formula, and the user service is prioritized later.

The results of the "Top 10 Economic Hotel Chain Brand IWOM Monitoring Report (2017)", which was launched by Rule of Law Weekend in conjunction with a third-party public opinion monitoring organization, showed that Ruijia performed the worst in terms of brand reputation damage, followed by Hanting and 7 Days.

Online rambling business map, offline has a penetrating layout, this first-mover advantage makes Ctrip this enterprise from the perspective of profitability is excellent.

But this kind of excellence from the beginning of 2015 missing an important part of the goodwill and care for the user. In the eyes of many entrepreneurs who believe in the law of the jungle, this is not the link between success and failure, but in essence determines whether a company is really good.

This is something that gives Liang Jianzhang a real headache, and also determines why Ctrip, which has been enjoying a smooth ride since 2015, has never been able to get rid of the "traffic" thing. The service-oriented enterprises in the user service this link of values out of the problem, how to gather popularity?

Ctrip has been losing ground in the competition with Meituan, and the biggest killer app for Meituan to make Ctrip suffer is traffic.

The USG cuts into the user service with scenarios, and users have the habit of booking scenarios, which is the entrance to the traffic.

Compared to Ctrip, Meituan has a richer offline scene and consumer resources, through the synergistic effect of the various product lines to reduce the cost of intermediate channels, so that users by ordering food, K songs and other high-frequency consumption to travel, hotels and other low-frequency consumption; and, the latter's channel sinking is more ferocious, in many third and fourth-tier cities, Ctrip has almost no competitive advantage.

Ctrip's traffic entrance? In the past, it relied on a huge push team, and now it is added to the "Ctrip in the hand, say go" such pervasive television advertising to attract traffic, plus even if unprofitable, even if the negative frequent also refused to give up the old air ticket booking entrance, but this obviously lagging behind the means of this era, has been insufficient to allow Ctrip to rest easy. The company's main goal is to make sure that the company's products are not used in any way that could cause any problems.

What's even more poignant is that Ali's traffic has produced a Flying Pig, Meituan's traffic has produced a Meituan Wine Tours, and Baidu's traffic has produced a Where to go. But to Ctrip here, Liang Jianzhang can not find the flow. The flow of pain, and Ctrip in the treatment of the user when the loss of control, mutual cause and effect - can not find the flow, can only take the user to open the knife; the user suffered a loss, more to come.

Liang Jianzhang is a business genius, but he ruled the Ctrip in the user neither good will nor creativity, only outrageous malice.

These details are enough to prove, once again, that people without a spirit of service in the service industry are a disaster for everyone.

(Author Guo Liang is a writer of corporate history and biography, with bestsellers such as Hustle and Reincarnation: 60 Years of Business in China)

References:

China Entrepreneur: "Ctrip is the Public Enemy of All People"

Hufeng: "Ctrip is in Danger"

Finance World Weekly: "Liang Jianzhang: Seeing Through the Population, But Can't Save People's Hearts"

Wu Xiaobo Channel: "Ctrip's 'Global Game'

Rule of Law Weekend: "Nu Jia's 7-Day Brand Image Needs Improvement, Negative Public Opinions Repeatedly Occurring"